Good points, and thanks for looking up the articles. This incident occurred in 2019, so probably right around the time of the increased fines, as you mentioned.
Here's my understanding of what happened from that time - keep in mind it's basically thirdhand information, from my wife, who got it from her mother, who pieced it together from talking to the ship's owner, the owner's wife, and the limited opportunities she had to talk to her husband (my FIL) while he was detained, imprisoned, or whatever.
My understanding of why they were held so long instead of just paying the fine is that the ship's owner didn't want to pay a dime, and none of the fishermen had any money. The 2019 article you linked says the minimum fine per crewman would have been RM 100,000, which according to Google is almost $28,000. This was probably 2 years' salary for my FIL and the other crewmen, who wouldn't have had any money at all, as they weren't paid until after a fishing trip was completed, and they had already been on the waters 8 or 9 months at the time of the arrests. There were a few court proceedings during those 7 months, in which the ship owner had a Malay-speaking lawyer representing all of the fishermen (but as I was led to understand, probably more concerned with representing his own interests - not surprising, I suppose). None of the crew members had a clue what was said during any of the proceedings either by the court or by the attorney supposedly representing them, but simultaneously representing the ship's owner.
It was also my understanding that the owner's main concern, aside from not having to pay any money (or pay as little as possible) was getting his seized ships back (there were 2 ships seized together with a total of 30ish crewmen, I believe). In the end, getting the men released was conditioned upon his own (the owner's) admission of fault or guilt and then paying the hefty fine. And in the end, I believe that is what happened - I'm not sure if it was a negotiation of sorts, or haggling, for 7 months, but this was my perception. I don't know much about the court system in Malaysia, or how on the up-and-up they are, but it didn't seem that strange to me that the men would be held for 7 months without an actual conviction when even in the USA, you can look at the famous case of Kalief Browder, who was imprisoned for years in one of the toughest prisons in New York without a trial before eventually killing himself. Also, the owner of the ships never set foot in Malaysia during these proceedings, so there was never any risk of him himself being detained in the matter.
Again, that's all my understanding from three years ago, and maybe not all that important other than being as honest and detailed as we can on the form and hoping for the best. Regardless of what happens, I'm just glad we've been able to support my wife's family in her dad's retirement, as it was a tough, dangerous job. Just last year, her cousin was killed by pirates and his body just dumped in the ocean when the ship he was fishing on was hijacked and the remaining crew members held for ransom. Less than a year before her dad's arrest, another cousin died on a fishing ship under hazy circumstances, his body never recovered. Rough job, commercial fishing in Vietnam.